Wyoming and New Mexico governors walk a
jagged line between conservation and fiscal conservatism

SOCORRO, NEW MEXICO — Almost two years ago, voters
in both New Mexico and Wyoming dumped their Republican governors
and elected Democrats. Since then, New Mexico Gov. Bill Richardson
has railed against the Bush administration’s plans to drill
for oil and gas on Otero Mesa (HCN, 3/29/04: New Mexicans take a
stand against oil and gas). Wyoming Gov. Dave Freudenthal has
warned that gas wells threaten the state’s wildlife and
water.

Still, despite the governors’ expressed
concerns, there’s little indication they’ve slowed
production. If anything, it’s probably the opposite.
Freudenthal, faced with a Legislature long dominated by
pro-industry Republicans, can’t do much except push for
better enforcement of environmental rules. Richardson, for his
part, understands that energy companies pay a big chunk of the
state’s bills — and he isn’t burning his bridges
with industry.

In fact, this year, Wyoming and New Mexico
were the only two states in the Lower 48 to produce balanced
budgets, thanks to severance taxes on oil, gas and coal, and
royalties from mineral development on federal land. Wyoming, after
some lean years, enjoyed prosperity for the first time since the
legendary 1980s boom years. New Mexicans, meanwhile, lined up for a
slew of local "pork" projects.

In a lightly populated
state like Wyoming, the energy industry is so dominant that
citizens — even with an elected governor who has good
intentions — wield little clout against the giants that pay
most of the public bills. New Mexico, now on an economic roll, will
be reluctant to tamper with a sure source of potential revenue.
Even with Democrats in the governors’ mansions, it’s
still mostly petro-politics as usual in the nation’s
mini-Middle East.

"Split-estate"
showdown

Freudenthal, whose roots are in ranching, is an
outdoorsman and hunter, but he never ran as an environmentalist
(HCN, 2/17/03: Wyoming at a crossroads). He’s backed a plan
to shoot wolves and gone to court to keep snowmobiles in
Yellowstone National Park. Still, when it came to slowing the
state’s exploding energy development, environmentalists
thought Freudenthal would be an ally.

Gas development in
Wyoming — once confined to isolated, fairly compact fields
— has spread virtually statewide. Thousands of coalbed
methane wells have already been drilled across the Powder River
Basin in northeast Wyoming, and thousands more are proposed.
Industry is also targeting the Hanna Basin in southern Wyoming, the
Wind River Basin in the central part of the state, and the Upper
Green River Basin just south of Yellowstone National Park (HCN,
8/18/03: Where the antelope and the oil companies play). Some
estimates suggest that as many as 50,000 gas wells will be drilled
around Wyoming over the next decade.

Increasingly, the
drilling has moved to private land, where people own the surface
but not the mineral rights underneath. In these so-called
"split-estate" situations, mineral access enjoys priority.
Literally thousands of "mom-and-pop" property owners simply must
take whatever a company offers, then step aside as the drilling
begins.

While Wyoming has traditionally been lax in its
regulation of oil and gas — in the 1970s, sympathetic
legislators exempted oil and gas facilities from the Industrial
Siting Act, effectively removing state scrutiny from a major sector
of industrial development — opposition has recently
mushroomed. Earlier this year, landowners, environmental groups and
their legislative allies worked out a proposal aimed at giving
split-estate owners more bargaining leverage, and got
Freudenthal’s backing. "This is one of the issues that put
him there (in the governor’s office)," says Bill Garland, a
split-estate property owner and activist. "He said he would not
knuckle under to the oil and gas people."

In his opening
legislative address in February, Freudenthal not only pushed for
split-estate reform, but also warned that "the same national energy
economy that fills our coffers could inadvertently turn our state
into a water and wildlife wasteland."

Activists were
ecstatic, but Freudenthal’s message netted a cool reception
from the GOP-dominated Legislature. One Republican leader dismissed
his assertions as "over-the-top rhetoric." Legislators did agree
with his plan to beef up the state’s Department of
Environmental Quality and increase state coalbed methane compliance
inspections. The split-estate proposal, however, "went down big, in
flames," recalls Garland. "They brought in the big guns," he says,
referring to intense lobbying by oil and gas companies to kill the
legislation.

Freudenthal blames industry "scare tactics"
for the defeat, but environmentalists say that he could be more
assertive. "It’s troublesome," says Dan Heilig, executive
director of the Wyoming Outdoor Council, the state’s largest
environmental group. "Where he finds it might be politically
expedient, he’s not hesitant to send in his legal attack
dogs. (But) when he’s urged by Wyoming sportsmen and wildlife
advocates to do more, he throws up his hands and says he has no
authority."

Freudenthal says he’s trying to strike
a balance: "I don’t think I’m going to be the
centerfold of the next Wyoming petroleum industry publication, and
we’re not a subsidiary of the Sierra Club."

Green on the outside

In New Mexico, Gov.
Richardson is quick to cite his position on Otero Mesa as evidence
of his green credentials. "I’m a very strong
environmentalist, and I think I’ve demonstrated that by my
stand on Otero Mesa," he says. And he tilts toward environmental
considerations when he makes decisions, because, he says, "I feel
that quality of life and protecting the water and land is very
important in New Mexico." Richardson also "cleaned house" at the
State Game Commission, tossing out the "good old boy"
rancher-dominated appointees.

Still, some observers say
his actions smack of "political opportunism." His top priority is
neither the environment nor keeping energy companies in check, but,
as Richardson relentlessly tells audiences around the state,
economic development — much of it financed by oil and gas
money.

Richardson’s administration has called for
increased exploration — even more than the federal government
has proposed — at an area on the Jicarilla Ranger District in
the Carson National Forest in northern New Mexico. A Richardson
spokesman told the Santa Fe New Mexican that the area, which sits
on the edge of the San Juan Basin, represents a "higher payoff for
the public" than proposed drilling at Otero Mesa.

Gilbert
St. Clair, a University of New Mexico political science professor,
says Richardson’s pro-environment actions are aimed more at
accommodating the strong green movement in the northern part of the
state he once represented in Congress. "He’s careful to call
the polluters to task," St. Clair says, "but I don’t see any
real policy initiatives."

Richardson’s approach to
development simply reflects New Mexico politics, St. Clair says,
"which are not about ideas, but about jobs and contracts.
It’s about distributing the goodies."

Petro-realities and windy possibilities

Even
with new occupants in the governor’s mansions in Cheyenne and
Santa Fe, the two states remain tightly tied to their petro-riches,
the energy booty that keeps a large share of the West in a sort of
colony status, even as it fuels the rest of the country.

Still, there is a glimmer of change: At a conference in Albuquerque
in April, using his clout as a former diplomat and U.S. Energy
secretary, Richardson challenged Western governors to put more
emphasis on renewable energy, such as solar and wind power. The
West, "where the wind blows and the sun shines," he said, has the
potential to become a cleaner, more efficient source of energy.

That’s a tall order, given that renewables
currently account for only about 1 percent of the West’s
electrical generating output, according to a new report by Western
Resource Advocates. The Boulder, Colo.-based nonprofit is pushing a
plan that would increase the renewable share to 20 percent by 2020,
when the region’s population is expected to have grown by the
equivalent of five Denvers. The group’s John Nielsen says the
West’s businesses, not the governors, will lead the way
because renewable energy offers reliability, low cost, and the
cleaner air that means healthier employees and citizens.

Randy Udall, an energy consultant with the Community Office for
Resource Efficiency in Carbondale, Colo., says the private sector
will help develop the region’s "world-class" wind power
simply because its cost is now competitive with natural gas. But
it’s "politics that can change a landscape," he says, and "we
need leadership to bring these innovative, cutting-edge renewable
technologies on," especially solar power in the Southwest.

Richardson, for his part, has created a task force to
study building a concentrating solar power plant in his state. He
has also declared New Mexico the "Clean Energy State."

But for now, the big money and the power still lie with the oil and
gas industry. The new coalbed methane developments —
Colorado’s Piceance Basin and Wyoming’s Pinedale
Anticline — offer production in the trillions of cubic feet
of gas, each field worth perhaps $50 billion, says Udall:
"That’s enough money to buy a dozen governors."